Gao Qin Sheng, mother of Shi Tao, a Chinese reporter who was sentenced last April to 10 years in prison for leaking state secrets abroad, cries as CEO of Yahoo! Inc. Jerry Yang (L) testifies before U.S. House Foreign Affairs Committee hearing on Capitol Hill in Washington November 6, 2007. The committee is hearing on "Yahoo! Inc.'s Provision of False Information to Congress" regarding the American company's role in landing Chinese journalist Shi Tao behind bars in China. REUTERS/Hyungwon Kang (UNITED STATES)

Photo: HYUNGWON KANG

Gao Qin Sheng, mother of Shi Tao, a Chinese reporter who was...

Image 3 of 4

*** FILE *** This undated file photo, released on Nov. 22, 2005 by the Committee to Protect Journalists (CPJ) shows Shi Tao, a freelance journalist for Internet publications and an editor for the Chinese business newspaper Dangdai Shang Bao. A House committee chairman Monday Nov. 5, 2007 angrily rejected Yahoo Inc.'s explanation for why it provided incomplete information to Congress about its role in the arrest of a Chinese journalist. "Yahoo claims that this is just one big misunderstanding. Let me be clear _ this was no misunderstanding," said Foreign Affairs Committee Chairman Tom Lantos, D-Calif. "This was inexcusably negligent behavior at best, and deliberately deceptive behavior at worst." (AP Photo/Committee to Protect Journalists, File) 2005 FILE PHOTO. NO SALES

Photo: Ho

*** FILE *** This undated file photo, released on Nov. 22, 2005 by...

Image 4 of 4

Wang Xiaoning, a political dissident currently jailed in China, is pictured with Yu Ling back in 1979. Source: China Information Center
Ran on: 03-09-2007
Wang Xiaoning, a political dissident jailed in China, is seen with wife Yu Ling in this 1979 photo. Yu is planning to sue Yahoo.
Ran on: 11-07-2007
Jerry Yang, Yahoo CEO

Jerry Yang, Yahoo Inc.'s CEO, and the company's top lawyer were lambasted Tuesday as moral "pygmies" by a top House Bay Area Democrat for the firm's role in helping China identify and jail a journalist in 2004.

Lawmakers of both parties accused the Sunnyvale Internet giant of putting its profits in a booming China market ahead of human rights by turning over secret data that enabled Chinese officials to track down and punish dissidents.

Yang defended his company's efforts to operate in a country with severe restrictions on free speech but was criticized by lawmakers who were furious that Yahoo didn't resist China's efforts to censor its citizens.

"I've invested my professional life in this company, and I believe in the Internet and its incredible power," said Yang, who co-founded Yahoo while a Stanford University graduate student and became the company's CEO in June.

"I also know that governments around the world have imprisoned people for simply speaking their minds online. That runs counter to all my personal and professional beliefs."

The hearing began with Yang, who immigrated from Taiwan at age 10, entering the hearing room and bowing and apologizing to the mother of journalist Shi Tao and the wife of Internet writer Wang Xiaoning. They received 10-year sentences after being identified with the help of information from Yahoo.

The act wasn't enough for Lantos. He called on Yang and Yahoo chief counsel Michael Callahan to turn and face the dissidents' families, seated in the front row, and plead for forgiveness.

"I would urge you to beg the forgiveness of the mother whose son is languishing behind bars thanks to Yahoo's actions," Lantos said. Shi's mother, Gao Qin Shen, had tears in her eyes as the two executives complied.

House lawmakers called the hearing after discovering new details about Yahoo's handling of Shi's case, which cast doubt on the company's earlier explanations of what happened.

Shi, 37, a reporter for a business journal in the Hunan province, got in trouble for a single act: On April 20, 2004, the Chinese government ordered the country's news media not to write about the 15th anniversary of the Tiananmen Square protests. Shi, using his Yahoo e-mail account, forwarded the order to a pro-democracy group.

When Chinese officials found out, they ordered the Hong Kong office of Yahoo China to hand over records that would identify the sender. The company complied.

In November 2004, Shi's home was raided, his computer was confiscated, and his family was told not to talk about the case. In March 2005, he was given a 10-year sentence.

In February 2006, the Republican-controlled House held a seven-hour hearing in which executives from Google, Microsoft, Cisco Systems and Yahoo were grilled about their compliance with censorship laws in China and elsewhere. At the time, Callahan testified that when Yahoo turned over information about Shi to Chinese authorities, "we had no information about the nature of the investigation."

The statement turned out to be false. Documents unearthed by the San Francisco-based Dui Hua Foundation showed that Yahoo China officials had received a subpoena-like document on April 22, 2004, from the Beijing State Security Bureau that stated, "Your office is in possession of items relating to a case of suspected illegal provision of state secrets to foreign entities." China has often cracked down on dissidents by accusing them of leaking state secrets.

Rep. Chris Smith, R-N.J., who chaired the original hearing, said he couldn't believe no one had told Callahan about the document before his testimony.

"How could a dozen lawyers prepare another lawyer to testify before Congress without anyone thinking to look at the document that had caused the hearing to be called?" Smith asked. "This is astonishing."

Callahan apologized to the committee but insisted he had not tried to mislead lawmakers. He said he only found out about the "state secrets" document in October 2006 when the Hong Kong Privacy Commissioner opened an investigation to see if Yahoo had violated local privacy regulations. He admitted it was a mistake not to inform Congress immediately.

"There was never an intent or a plan to conceal this information in any way," Callahan said

Lawmakers were furious that no one tried contacting Congress to correct the error and that no one at Yahoo has been fired or demoted for its handling of the case.

Yahoo officials might have underestimated how harshly they would be rebuked by the committee, which is stacked with human rights activists and led by Lantos, a Holocaust survivor who fled Nazi persecution in Hungary, and ranking Republican, Rep. Ileana Ros-Lehtinen of Florida, whose family fled Cuba and who is an ardent foe of Cuban leader Fidel Castro.

Yang and Callahan argued that it was better to try to expand the Internet in China even if that meant agreeing to live under its repressive rules.

"We continue to believe in engagement in markets like China," Yang said. "Why? Today, despite broad limitations on sensitive political subjects, Chinese citizens know more than ever before about local public health issues, environmental causes, politics, corruption, consumer choice, job opportunities and even some foreign affairs."

But most lawmakers complained that Yahoo appeared more focused on making money in China - with more than 150 million Internet users - than boosting the freedoms of its people. Smith compared Yahoo to companies who helped the Nazis accelerate their campaign to exterminate Jews in Europe.

"There certainly is a parallel here," Smith said. "People are being tortured and mistreated today because of that complicity."

Callahan said Yahoo had little choice about whether to agree to Beijing's orders because Yahoo employees would have been jailed for refusing to comply.

"I cannot ask our local employees to resist lawful demands and put their own freedom at risk, even if in my personal view the local laws are overbroad," he said.

Congress is considering legislation that would ban U.S. Internet companies from providing information on its customers to repressive regimes.

In 2005, Yahoo sold its interest in Yahoo China to the Chinese Internet giant, Alibaba. But Yahoo still has a 40 percent stake in Alibaba and Yang holds one of four seats on the parent company's board. Critics say the arrangement allows Yahoo to wash its hands of responsibility when China cracks down on Internet users. Yang acknowledged he has little say in enforcement issues.

"They say, 'We don't have any control over the operations,' " said Lucie Morillon, the Washington representative for Reporters Without Borders. "If the lack of control is putting more dissidents in jail, maybe it's time for them to renegotiate the contract."

Lawmakers also complained that Yahoo has done little to help the families of the jailed dissidents.

Yang said company executives were pleading for their release with Chinese officials. Shi and Wang and their families have filed a lawsuit seeking damages from Yahoo. In a move that surprised human rights activists, Yang and Callahan met with the two dissidents' family members after the hearing, which could be a first step toward settling the case.

In Business: China's Alibaba.com strikes it rich in first day of trading. C1